Central securities depository
A Central Securities Depository (CSD) is a specialist financial organization holding securities such as shares either in certificated or uncertificated (dematerialized) form so that ownership can be easily transferred through a book entry rather than the transfer of physical certificates. This allows brokers and financial companies to hold their securities at one location where they can be available for clearing and settlement. This is usually done electronically making it much faster and easier than was traditionally the case where physical certificates had to be exchanged after a trade had been completed. In some cases these organizations also carry out centralized comparison, and transaction processing such as clearing and settlement of securities. Scope A CSD can be national or international in nature, and may be for a specific type of security, such as government bonds. Domestic Central Securities Depository Many countries have one domestic CSD that was traditionally associated with the national stock exchange. These organizations are typically heavily regulated by the government and may or may not be separate from the exchanges where trading in securities occurs. International Central Securities Depository (ICSD) An International CSD is a central securities depository that settles trades in international securities such as eurobonds although many also settle trades in various domestic securities, usually through direct or indirect (through local agents) links to local CSDs. Examples of international CSDs include Clearstream (earlier Cedel), Euroclear and SIX SIS. Some view the US Depository Trust Company (DTC) as a national CSD rather than an ICSD, but it does holds over $2 trillion in non-US securities and in American depositary receipts from over 100 nations. Functions * Safekeeping Securities may be in dematerialized form, book-entry only form (with one or more "global" certificates), or in physical form immobilized within the CSD. * Deposit and Withdrawal Supporting deposits and withdrawals involves the relationship between the transfer agent and/or issuers and the CSD. It also covers the CSD's role within the underwriting process or listing of new issues in a market. * Dividend, interest, and principal processing, as well as corporate actions including proxy voting Paying and transfer agents, as well as issuers are involved in these processes, depending on the level of services provided by the CSD and its relationship with these entities. * Other services CSDs offer additional services aside from those considered core services. These services include Securities Lending and Borrowing, Matching, and Repo Settlement * Pledge - Central depositories provide pledging of share and securities. Every country is required to provide legal framework to protect the interest of the pledgor and pledgee. However, there are risks and responsibilities regarding these services that must be taken into consideration in analyzing and evaluating each market on a case-by-case basis.exchange-handbook.co uk article on the risks associated with Depositories, at the Handbook of world stock, derivative and commodity exchanges website. See also *Clearing house *Custodian bank Notes References *CSD Ratings and News Services External links CSD Associations *Asia Pacific Central Securities Depository Group *European Central Securities Depositories Association *America's Central Securities Depositories Association *Association of Eurasian Central Securities Depositories *Africa & Middle East Depositories Association National CSDs *Argentinian CSD *Australian CSD for government securities *Australian CSD for equities and corporate bonds *Austrian CSD *Belgian CSD *Belgian CSD for government securities *Bosnian and Herzegovian CSD *Brazilian CSD for equities *Brazilian CSD for coporporate bonds *Brazilian CSD for government securities *Canadian CSD *Chinese CSD *Croatian CSD *Cypriot CSD *Czech CSD *Danish CSD *Egyptian CSD *Estonian CSD *Finnish CSD *French CSD *German CSD *German CSD for government securities *Greek CSD *Greek CSD for government securities *Hong Kong CSD *Hungarian CSD *Icelandic CSD *Indian CSD 1 *Indian CSD 2 *Indonesian CSD *Irish CSD *Israeli CSD *Italian CSD *Japanese CSD 1 *Japanese CSD 2 *Turkish CSD *Latvian CSD *Lithuanian CSD *Macedonian CSD *Malaysian CSD *Maltese CSD *Mexican CSD *Mongolian CSD *Moroccan CSD *New Zealand CSD *Norwegian CSD *Pakistani CSD *Peruvian CSD *Philippine CSD *Polish CSD *Portuguese CSD *Romanian CSD *Romanian CSD for government securities *Russian CSD *Serbian CSD *Singapore CSD *Slovakian CSD *Slovenian CSD *South African CSD *South Korean CSD *Spanish CSD *Swedish CSD *Swiss CSD *Taiwanese CSD *Thai CSD *Turkish CSD *Ukrainian CSD *UK CSD *Uruguayan CSD *US CSD *US CSD for government securities *Vietnamese CSD International CSDs *Euroclear Bank *Clearstream Banking Luxembourg, CBL *SIX SIS Category:Payment systems Category:Securities Category:Stock market